Median returns for both sectors are higher by 7%–based on a mere 1.1% return in the physical metal. Wholly and without question, these moves are of the nonsensical varietal.
Markets are flagging here, giving up a 150 point gain, reminiscent to what occurred on Friday. This is, without question, a very ominous development for the morale of this market. The buyers of this late stage rally are of the cheapest cloth. Their loyalties lie only with their account balances.
Offer them a hard tape, and subsequent losses, and watch them flee the field of battle, en masse, paving the way for a Kool-Aid guy breaking through to the downside.
The rally in gold is more likely due to these mercenarial traders, floundering to find new opportunities, rather than a solid fundamental reason backed by strong asset reallocation.
A storm is coming.
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I believe there was an upgrade of most of the majors (GG not) today.
In any event they have restructured the last 2-3 years on the gold collapse
so they are more positively leveraged to the price.
Since the ’70s (1970s) the mining companies have led the metals price by about 6 months (per Papa Joe Granville), although this has not worked the last 8-12 years or so.
Perhaps they are returning to this leading of the metals price.
This is my story and will testify under oath, if asked.
The gold price is a genie in a bottle. With the price based instruments volume exceeding the metal, the urge to cover the certificates may spike within the bullion banks short notice.